The controlling shareholder shall use the company's equity to increase capital to invest in the company, or to facilitate the extension and merger of the company. On the evening of August 23, the company announced that Jilin TV, the company's controlling shareholder, intends to use its 100 million shares in Jilin TV Media to increase its capital and shares to its wholly-owned subsidiary, Jilin Jilin TV Investment Co., Ltd. (hereinafter referred to as: Jilin TV Investment). After the implementation of this capital increase and share increase, the 100 million shares held by Jilin TV Station will be transferred to Jilin TV Investment in the form of assets. Jilin TV Station will hold 35.14% of Jilin TV Media shares into 31.93% held by Jilin TV Station. 3.21% held by Jilin TV Investment. We expect that the high-quality investment projects that shareholders invest in the future will be injected into Gigi Media, forming a strategic synergy under the same control, which is conducive to the upgrading and transformation of the company's industry.
We will gradually promote the reform of state-owned enterprises and make steady progress in strategic transformation. Under the background of the "inflection point" in the cable TV industry, the company has laid out three major plates: "main business innovation", "financial investment" and "cultural tourism". As a traditional media with the background of state-owned assets, the company pays close attention to the natural advantages such as abundant cash flow, abundant data resources and educational resources, and makes positive transformation through a variety of ways such as epitaxial mergers and acquisitions. The controlling shareholder uses the company's equity to increase investment in the company, showing the flexibility and more subjective initiative of the state-owned capital, which lays the foundation for the future reform.
The company's semi-annual report results meet expectations and continue to implement diversification. During the reporting period, the company achieved a cumulative operating income of 1.0431888 billion yuan, an increase of 0.24% over the same period last year, and the net profit belonging to shareholders of listed companies was 168.303 million yuan, a decrease of 17.60% over the same period last year. In the face of the competitive environment and challenges of the main business multi-polarization market, while vigorously promoting the large-scale development of the company's value-added business, the company promotes the strategic layout and product penetration ability of the company in the field of social information services in various fields. we will continue to consolidate the overall investment layout of the "three major plates" in multi-industry fields, so as to lay a good foundation for the company to realize the leap of diversification.
The company's future highlights: 1) "10 Gigabit network chip" mass production. The company Huitong science and technology project has successfully developed the "10 gigabit network chip" of the intelligent access gateway based on the "I-PON standard", and the mass production standard has been improved year by year. 2) the "financial industry chain" is growing. The company's "financial investment plate" involves and covers commercial banks, private equity funds, Internet finance, supply chain finance, venture capital, asset management and many other financial investment fields. 3) enter the education information industry. In response to the construction needs of Jilin Provincial Education Department, the company's "Jilin Education Informatization Project" has built 6500 10-gigabit special networks for schools and teaching points, 105 synchronous live classroom channels, and 46, 32 and 27 exclusive subject channels for primary, middle and senior high schools respectively.
Profit forecast. We estimate that the EPS of the company from 2016 to 2018 is 0.14,0.15 and 0.16 yuan respectively. In the same industry, the PE of Huasu Media, Radio and Television Network and CITIC Guoan are expected to be 45, 51 and 63 times respectively in 2016. We value the company 37 times in 2016, corresponding to the target price of 5.18 yuan. Give an overweight rating.
Risk hint. The transformation of the company falls short of the expected risk.